With its core shipping business passing through a challenging phase, state-run Shipping Corporation of India believes it is not the right time to diversify by taking stake in shipbuilders, its chairman and managing director said.

"The plan has not been shelved but at the same time, when in the core business the generation of funds is under some pressure, you won't normally find that this is the ideal time to diversify," S Hajara told Reuters.

The company expects no immediate recovery in freight rates due to supply pressure, he said.